SPDR S&P 500 ETF (SPY) - Zacks Investment Research

06/01/2023

SPDR S&P 500 ETF (SPY)

$445.65 USD

Fund Type

Issuer

Benchmark Index Date of Inception AUM (million) Number of holdings in the ETF Assets in top ten holdings Expense Ratio Dividend Yield

Price Fundamentals of SPY Current Price 52-Week High 52-Week Low NAV (07/31/2023) 1Yr ETF Ret (08/11/2023)

Risk Statistics Beta (against S&P 500) Standard Deviation R2

Style Box - Large Cap Blend STATE STREET GLOBAL ADVISORS S&P 500 INDEX 01/29/1993 $414,222.76 505 30.36% 0.09% 1.46%

$445.65 $457.79 $356.56 $457.64

7.66%

1.00 18.13% 96.26%

Risk: Med

SPY Sector Weights

Price Chart

Zacks ETF Rank 3 - Hold

Zacks Opinion

The fund gives exposure to the S&P 500. Though the. coronavirus pandemic initially resulted in a bear market in mid-March 2020, the markets recorded a sharp rebound from the second half of 2020 on vaccine distribution. Economic reopening, President Biden's massive infrastructure bill, upbeat corporate activities and earnings helped risk-on trade sentiments and the fund in 2020 and 2021. However, rising energy prices, inflationary pressure, the Fed rate hikes since the start of 2022 and risks of global growth slowdown proved negatives for the index. However, the U.S. regional banking crisis emanating in Mar 2023 and chances of the Fed going slow ahead may drag down bond yields, going forward. The ebbing pandemic is also a plus. This could boost the fund SPY.

Key Points

Largest and most actively traded US ETF Diversified exposure to large-cap US stocks Low expense ratio and trading costs

Reasons to Buy

The ebbing pandemic, cheaper valuation

Reasons to Sell

High inflation, a hawkish Fed

The data on the front page and all the charts in the report represent market data as of 08/11/2023, while the report's text is as of 06/01/2023

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Holdings Breakdown

SPY has proportionate exposure in almost all sectors with maximum emphasis on Information Technology. Sectors like Healthcare, Financials and Consumer Discretionary also make up double-digit allocation. From an individual holdings perspective, it puts around 27.25% of the assets in the top 10 holdings. The holdings breakdown ensures that the ETF has low company as well as sector-specific concentration risk. The product puts almost all its assets in giant and large companies.

Performance

The fund is up about 10.3% this year as rates started to cool down. The fund is up about 2.7% this year on rising rate worries. Investors should also note that the ETF has a decent dividend yield of about 1.54%.

SPY Top 5 Holdings APPLE INC MICROSOFT CORP INC NVIDIA CORP TESLA INC

Weight % 7.54% 6.81% 3.06% 2.97% 1.87%

2-Year Comparative

Investment Objective

SPY seeks to match the performance and yield of the S&P 500 Index before fees and expenses. The performance of the S&P 500 Index is considered to be a mirror image of the U.S. equities, as the index represents stocks of the 500 most-valued companies in the U.S.

Analysis

This ETF is appropriate for investors seeking exposure to the U.S. markets with a focus on large-cap equities. It also offers a decent mix of value as well as growth stocks in its portfolio. The fund is highly liquid as it trades in massive volumes. The product is likely to be less volatile, given its extreme bias on large cap stocks. The ETF also enjoys a low tracking error. We recommend this product to long-term investors seeking safety of their investment.

Fundamentals Zacks Rank Price AUM (million) Expense Ratio Dividend Yield Assets in top 10 Beta YTD % Price Change (1)

SPY

IVV

VOO

$445.65

$448.03

$409.41

$414,222.76 $347,760.89 $331,847.28

0.09%

0.03%

0.03%

1.46%

1.48%

1.52%

30.36%

30.40%

30.43%

1.00

1.00

1.00

17.35%

17.39%

17.40%

(1) Returns are net of fees. Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included

Description

Launched in January 1993, SPDR S&P 500 Index Fund (SPY) is a passively managed exchange traded fund designed to provide a broad exposure to the U.S. equity market with a focus on resembling the risk-return characteristics of large cap U.S. equities.

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10 S. Riverside Plaza Suite 1600 ? Chicago, IL 60606

06/01/2023

Detailed Analysis

The key U.S. equity index ? S&P 500 ? had an awful run in 2022. Rising energy prices, inflationary pressure, the Fed rate hikes since the start of 2022 and risks of global growth slowdown proved negatives for the index.

The S&P 500 index has a considerable weight in the technology sector, which underperforms in a rising rate environment as these are growth-stocks in nature. Overall, the S&P 500 lost about 18% in 2022.

Though many are expecting an economic recession in 2023, strength in the labor market, falling commodity prices which will offset rising service and declining rent prices will result in less likelihood of a recession. Earnings growth estimates are still decent, which should support the S&P 500 investing.

Moreover, the U.S. regional banking crisis emanating in Mar 2023 and chances of the Fed going slow ahead may drag down bond yields, going forward. The ebbing pandemic is also a plus. This could boost the fund SPY.

So, for investors having a bullish view on the market over the long run, SPY should be considered as an appropriate option with a moderate level of risk. The fund is a safe bet thanks to its blend style and entire focus on large caps, which are less volatile than mid-and small-cap stocks.

Core S&P 500 ETF (IVV)

IVV seeks to track the S&P 500 Index. The fund invests about $304.9 billion of assets in more than 500 holdings. Like SPY, Microsoft, Apple and Amazon take up the top three spots in IVV's portfolio. The fund charges an expense ratio of 0.03%.

S&P 500 ETF (VOO)

Like SPY and IVV, VOO also tracks the S&P 500 Index. The fund invests about $282.7 billion of assets in 509 holdings. Microsoft, Apple and Amazon are the top three holdings. The fund has an expense ratio of 0.03%.

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10 S. Riverside Plaza Suite 1600 ? Chicago, IL 60606

06/01/2023

Glossary

ACTIVE MANAGEMENT:

ALPHA:

AMERICAN DEPOSITORY RECEIPT: AUTHORIZED PARTICIPANTS:

AVERAGE YIELD TO MATURITY: BASKET: BETA: BID/ASK SPREAD:

CONTRARIAN: CREATION UNIT:

DIVIDEND YIELD: EFFECTIVE DURATION: ENHANCED INDEXING:

EXCHANGE TRADED FUND:

EXCHANGE-TRADED NOTE:

EXPENSE RATIO: FUND OF FUNDS: FUNDAMENTAL INDEXING: INDEX: INVERSE ETF:

INVESTMENT STYLE: LEVERAGED ETF:

A portfolio management strategy where the manager uses variety of skills and attributes (like top-down approach, bottom-up approach, value investing, growth investing or absolute returns strategy) in the portfolio so that the fund outperforms the benchmark index. A measure of outperformance that can be calculated as the return of the fund minus the benchmark s return. A positive alpha indicates the fund has outperformed the benchmark index whereas negative alpha means underperformance. A negotiable non-US security that trades in the US financial market.

An entity chosen by an ETF sponsor to undertake the responsibility of obtaining the underlying assets needed to create an ETF. Authorized participants are typically large institutional organizations, such as market makers or specialists. The expected rate of return on a fund s portfolio if it is held until the maturity while reinvesting all coupon payments at the bond yield. A portfolio of several stocks or securities that are selected for the inclusion in the fund with different weightings. A measure of risk compared to the market benchmark. A beta of less than 1 indicates that the fund is less volatile than the market and vice versa. The difference between the highest price that a buyer is willing to pay (often called bid price) for the underlying assets of securities of the fund and the lowest price that a seller is willing to accept (often called as offer or ask price) for it. An investment style that goes against prevailing market trends (i.e. against the thinking of many) by buying assets that are performing poorly and then selling when they perform well. A set of securities or underlying assets that can be created or redeemed by Authorized Participants for a certain number of ETF shares with the fund or trust. The creation units can vary in size ranging from 25,000 to 600,000 shares each. A financial ratio that measures how much a company pays out in dividends each year relative to its share price. It can be calculated as annual dividend per share divided by price per share. A measure of a fund s interest-rate sensitivity. The longer the duration, the more sensitive is the fund to the changes in interest rates. An investment idea that attempts to amplify the returns of an underlying asset or the fund with lower tracking error. Enhanced indexing combines elements of both passive and active management. The fund represents a basket of securities (that typically track an index), and is listed and trades like stocks on an exchange. ETFs can be traded throughout the day in amounts as little as one share. The note is a senior, unsecured, unsubordinated debt issued by a major bank. It has a maturity date and is backed only by the credit of the issuer. The ETN however, do not actually hold any security, instead an issuing bank promises to pay to investors the amount reflected by the index s performance (minus fees). An annual fee that the fund or ETF charge from the investors in order to provide exposure to the underlying asset. A fund that invests in other funds instead of investing directly in stocks, bonds or other securities. A type of equity index in which stocks or securities are selected based on fundamental metrics such as revenue, dividend rates, earnings or book value. An imaginary portfolio of securities representing a particular market or a portion of it. An ETF that provides opposite (inverse) exposure in the underlying index though use of various financial and money market instruments over a specified period of time. This ETF is similar to holding a short position in order to take profit from the falling prices. A different style of investing such as growth, value and blend in a basket of asset. An ETF that uses various financial instruments to amplify the returns (up to 3 times) of the underlying index over a specified period of time.

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10 S. Riverside Plaza Suite 1600 ? Chicago, IL 60606

LIQUIDITY: MARKET CAPITALIZATION: NET ASSET VALUE: PASSIVE MANAGEMENT: PORTFOLIO TURNOVER: R-SQUARED: SECTOR ROTATION: SEC YIELD: SHORT ETF: STYLE BOX:

TARGET DATE FUND: TRACKING ERROR: TREASURY INFLATION PROTECTED SECURITIES:

VOLATILITY: VOLUME: YIELD CURVE:

WEIGHTED MATURITY:

06/01/2023

The degree to which an asset or security can be bought or sold in the market without affecting the asset s price. Liquidity is characterized by a high level of trading activity. Represents the aggregate value of the fund or underlying asset. Value of an ETF on per share basis and is calculated as total asset minus total liabilities divided by number of shares. A portfolio management strategy where the fund is the mirror image of the performance of the benchmark index. A percentage of underlying assets bought and sold in a given year. A measure of correlation with the market benchmark. An R-Squared of 100 indicates perfect correlation of the fund that of market while an R-Squared of 0 indicates no correlation. A strategy that involves moving from one sector to another by selling the underlying assets or securities of a sector and purchasing securities or assets in another. A standard yield that the bond funds must pay to its shareholders based on the most recent 30day period covered by the fund s filings with the SEC. An investment strategy that offers to take short position in the underlying index through various financial instruments. A visual representation of the fund, created by Morningstar, to determine risk-return structures of the portfolio. A style box is comprised of nine squares, or categories, that classify securities by size (small, mid and large cap) along the vertical axis and by value, growth and blend characteristics along the horizontal axis. A fund that invests exclusively in the assets or securities with a certain defined maturity. A measure of how closely a portfolio follows the benchmark index. It is calculated as the difference between the returns of fund portfolio and the benchmark index. The bonds that are issued by the U.S. Treasury to protect against inflation. These securities pay interest on an inflated-principal amount (principal rises with inflation) and when the securities mature, investors get either the inflation-adjusted principal or the original principal, whichever is greater. A measure of risk calculated by the annualized daily movement in the fund price. The lower the volatility of the fund the better it is. The number of shares traded in the market during a given period of time. A line that plots the interest rates of bonds having equal credit quality but differing maturity dates. The yield curve provides an idea of future interest rate change and economic activity. It generally compares the three-month, two-year, five-year and 30-year U.S. Treasury debt The remaining time to maturity of the underlying securities in a portfolio. A fund with a short average maturity is more sensitive to current interest rate fluctuations than one with longer average maturity.

Disclosure

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Please read the prospectus carefully.

The data on the front page and all the charts in the report represent market data as of 08/11/2023, while the report's text is as of 06/01/2023

?2023 Zacks Investment Research, All Rights Reserved

10 S. Riverside Plaza Suite 1600 ? Chicago, IL 60606

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